Japan : Household Spending
Household spending declined for a twelfth straight month in March. On the year, spending was down 10.6 percent after sliding 2.9 percent in January. Consumption has been weak since last April when Japan raised its consumption tax by 3 percentage points to 8 percent. Spending in the most of the subcategories declined. The biggest drops were in furniture & household utensils (down 39.6 percent) and transportation (down 16.1 percent). Only education advanced, this time by 3.1 percent on the year.
Japan : PMI Manufacturing Index
April final manufacturing PMI slipped the below the breakeven 50 level with a reading of 49.9. The data indicated worsening operating conditions in the Japanese manufacturing sector. Manufacturing production contracted for the first time since July 2014 in April. This was underpinned by a further decline in new orders, with the rate of decline the fastest since when the higher sales tax increase was implemented in April last year. Panelists reported a fall in demand from both domestic and international clients and challenging economic conditions as the main factors behind the decline in new work.
Production contracted for the first time since July 2014, underpinned by a further decline in new orders. Meanwhile, growth in new export orders slowed to the weakest in the current 10-month sequence of expansion. On the price front, input price inflation eased to the slowest in over two years.
At 49.9 in April, the headline PMI signaled a fractional deterioration in operating conditions in the Japanese manufacturing sector for the first time in almost a year. Furthermore, the headline PMI has only posted below the 50.0 no-change mark three times in the past two years.
China : CFLP Manufacturing PMI
April CFLP manufacturing PMI inched up to a reading of 50.1 — barely over the 50-point level that separates growth from contraction. The result was better than expectations, with economists predicting that the reading would be a breakeven 50. The March reading was also 50.1.
Four of ten sectors recorded readings over the 50 breakeven level. They were production (52.6), new orders (50.2), supplier delivery times (50.4) and business expectations (59.5). However, new export orders, finished goods inventories, imports, input prices, raw materials inventories and employment continued to contract.
China’s economy, which has enjoyed some of the fastest growth rates in the world in the past two decades, is now slowing and policymakers recently said it will target economic growth of “around 7 percent” this year, the slowest expansion in a quarter century.
Econintersect: Week 16 of 2015 shows same week total rail traffic (from same week one year ago) declined according to the Association of American Railroads (AAR) traffic data. Intermodal traffic improved, which accounts for half of movements – but weekly railcar counts remain in contraction.
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